Traditional broker or Zillow
What’s the deal with traditional real estate agents and Zillow? Why do you feel gaslighted every time you try to talk about commission with a traditional agent? The reason is that the United States residential real estate industry is built upon monopoly, collusion, regulatory capture, and historically cartel like behavior that has successfully maintained a near 6 % average commission for decades.
Everywhere else in the modern world, people pay 1.5% to 2%.
This doesn’t mean that real estate agents are bad. But it does mean that if you as a home seller do not understand how the commission mechanics work, you may end up unnecessarily paying tens of thousands of dollars in commissions with no additional value. Hard stop.
In fact, recent economic research has even found that the abnormally high levels of US commission actually end up costing home sellers more money than they think. The big commission dollars end up distorting the behavior of the real estate agents and it ends up costing home sellers even more money than just the commissions-- they measured this effect and it was as much as
And Zillow? Well they make money from these high commissions as well. Ads on Zillow are valuable to the agents that pay for them, primarily because they can make big money on the commissions.
Add it all up-- 6% in commission, 7-9% on multiple offer nonsense or equivalent. Misunderstnding how real estate transactions and commissions work can end up costing you as much as 15% of the value of your home. No joke.